Hello, I hope the following assists you.
You are correct to suspect a broken heater flap this is very common on this model and gives the symptoms you describe. The airflow will work correctly as it's the hot/cold flap that will have broken not the air direction flaps, these flaps are made of plastic and become brittle.
Unfortunately to replace the flap means removing the heater assembly which is quite a large job as you need to remove the dash to do so.
An example of a repair kit is http://www.ebay.co.uk/itm/HEATER-FLAP-REPAIR-KIT-FOR-PEUGEOT-407-CITROEN-C5-DUAL-ZONE-AIR-CONDITIONING-/370914430267?pt=UK_CarsParts_Vehicles_CarParts_SM&hash=item565c390d3b
as you can see the part is not cheap, I'm aware of people buying a second hand heater assembly rather than just replacing a flap.
I hope this helps, let me know if I can assist further.
Thanks for the advice, ti's been very helpfull.
Is there any specific order to dismantling the dash, where do I start?
start with removing the center part of the dash where the audio unit fits in, if my memory serves me correctly you need to remove some fasteners from under the bonnet as well. The dash comes out in quite a large lump so it's not as much work as you would expect but is long winded. Also you'll need to drain the A.C system and plug the heater hoses.
Let me know if I can assist further.
Thanks very much Sean you've been a great help
let me know if I can assist further.